On November 1,2012,FastCare Sold $5,000,000 of Three-Year Bonds for $4,750,325

question 37

Multiple Choice

On November 1,2012,FastCare sold $5,000,000 of three-year bonds for $4,750,325. From the proceeds,the company paid accounting fees of 50,000.Interest of 5% is payable annually.What is the effective rate of interest to 2 decimal places?

• A)7.30%
• B)5.00%
• C)4.69%
• D)3.63%

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Definitions:

Book Value

The net asset value of a company calculated as total assets minus intangible assets and liabilities.

Net Income

The residual income a company has after expenses and taxes are deducted from its total income.

Comprehensive Income

The change in equity of a company during a period from transactions and other events, including all non-owner changes.

Sales

The total revenue a company generates from selling goods or services within a specific period.